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| Here’s your daily business briefing. - 🏢 Nippon Steel buying U.S. Steel for $14.1B
- 🏙️ Morgan Stanley: Analysts assess NYC footwear
- 🎄 Holidays on credit: Debt for half of U.S. shoppers
Make sure to continue reading the Quarterly Earnings Report and the Quick Hits. Thanks for reading!! Shriram
p/Shriram | |
| 1 | | Nippon Steel has agreed to acquire U.S. Steel in a $14.1B deal, positioning Nippon Steel as a significant player in U.S. steelmaking and a top supplier to the American auto industry, with access to specialized steel for electric vehicle motors and other applications. The deal values U.S. Steel at $55 per share, reflecting a 40% premium compared to the company's share price at the previous Friday's market close. More: - Nippon Steel will become the world's second-largest steel manufacturer, trailing only China Baowu Steel Group in capacity.
- U.S. Steel will keep its name, logo, and Pittsburgh headquarters after the deal closes.
- The United Steelworkers Union criticized the acquisition, deeming it greedy and shortsighted, while lawmakers expressed concerns about the foreign sale and stressed the importance of domestic ownership for national security and military production.
- The Committee on Foreign Investment in the U.S. (Cfius) may be used by the Biden administration to closely examine the agreement and identify any possible hazards.
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| 2 | | 
What the numbers say: In a study by Morgan Stanley observing over 250 joggers in Central Park, Adidas represented roughly half of its estimated 11% market share, with Nike as the preference for 17% of joggers and younger brands Hoka and On Running making up about 25% of the sample. No single brand accounted for more than 20% of the sample. Relevance: Analysts find the study's insights, especially regarding Adidas, noteworthy as they indicate limited strides in gaining popularity among runners in a running-shoe market projected to surpass $74B in revenue by 2031. The competitive and fragmented nature of the market is evident, with Nike leading but not commanding more than a 20% share in the sample. More data: Morgan Stanley's research showcases equity analysts adopting alternative data-gathering methods to glean insights into market trends and consumer preferences, mirroring a trend from 2019 when a Jefferies LLC analyst worked shifts for Deliveroo Plc to deepen their understanding of the food-delivery sector. | | | |
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| 3 | | Half of U.S. consumers plan to go into debt for holiday spending, with 37% expecting to take two or more months to pay off bills. Compared to the previous year, 59% plan to spend the same, 21% more, and 20% less during the holidays. More: - Finding deals on gifts (51%), avoiding overspending on gifts (33%), and having enough money for the holidays (26%) are factors that influence customers' adherence to their budgets.
- Preferred payment methods are influenced by household income; of those making $50,000 or more, 46% use credit cards for Christmas expenses, compared to only 23% of those making less than $50,000.
- Among households earning less than $50,000, 25% use cash, and 40% use checks and debit cards to pay for holidays.
- According to a LendingTree poll, 35% of American consumers in 2022 incurred debt for holiday buying, a tiny decline from 36% in the previous year.
- In Q2 2023, credit card debt topped $1T, and, going into the holidays, American borrowers were predicted to be paying $300 on average per month towards their student loan obligations.
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| 4 | | Walmart has enhanced its fine jewelry selection by introducing lab-grown diamonds, providing affordable alternatives for value-driven customers. The retailer now offers a 1.5-carat lab-grown diamond engagement ring priced at $698, a considerable reduction compared to the retail cost of a similar-sized mined diamond. More: - Jewelry sales in the U.S. are predicted to reach $73.8B in 2023, with the peak season for buying being from October to February, which includes Valentine's Day.
- In 2022, sales of lab-grown diamonds increased to around $12B worldwide, a 38% increase from the previous year.
- Walmart's sales of lab-grown diamonds have increased by almost 600% yearly, which can be attributed to the category's expansion.
- By focusing on an upgraded experience with exquisite packaging, Walmart hopes to dispel the stigma attached to purchasing expensive jewelry from discount stores.
- The 24-karat gold ingot charm product, which Signet Jewelers is testing, is a wearable and personalized gold piece that appeals to buyers looking for stability and stored value.
- The rise of lab-grown diamonds has also been tapped into by other shops, such as Pandora and Brilliant Earth, which serve distinct consumer demographics.
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| 5 | | In 2021, global supply chain disruptions affected Care Bears' production in China, causing increased costs and inventory challenges, but now it has improved drastically. The cost of making a Care Bear has now returned to pre-pandemic levels, with the factory producing 1 million bears monthly, following a 25% surge in production costs during the 2021 disruptions. More: - Beijing's relaxation of COVID-19 restrictions has controlled logistical costs and made shipping containers readily available.
- With unloaded cargo requiring only three days to be loaded into trucks or trains, ports like Los Angeles are seeing improved turnaround times and a 90% decrease in the cost of shipping containers.
- However, the port's truck gates are left half the time unoccupied daily, a sign of low demand and abundant supply, and this year's worldwide trade is down 5%.
- Care Bear production is now faster, taking 32-35 days, but retailers struggle with changing consumer preferences, leading to reduced average toy spending and a rise in demand for smaller, more affordable options.
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- VF Corp. shares fell 7% following a cybersecurity breach, which is expected to have a significant impact on its business, just as the owner of The North Face and Vans prepares for the holiday season.
- Southwest faces a $140M penalty for its 2022 holiday disruptions, and CEO Bob Jordan assures that such an incident will not occur again as the airline prepares for the next Christmas weekend.
- The Big Four accounting firms are laying off partners due to overhiring and reduced demand amid higher interest rates and weaker economic conditions.
- Chinese EV manufacturer Nio secured a $2.2B investment from Abu Dhabi's CYVN Holdings, bolstering its financial position in the competitive electric vehicle market.
- 100K companies automate scheduling with Calendly. Teams are seeing 2x conversion rates, 30% increased customer retention, and 323% ROI. Sign up free.*
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 | Freelance Writer | | Shriram is pursuing Master’s in Business with Marketing at Warwick Business School. He worked as a Senior Consultant in Tech and Political Consultancies before his Masters. He is passionate about Tech, Marketing, Strategy, Anthropology and Politics. He is also the Postgraduate Ambassador for Warwick Business School. | | This newsletter was edited by Aaron Crutchfield | |
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